Detailed SWOT Analysis of Daikin – The World’s Largest Manufacturer Of Air Conditioners

Quick Stats on Daikin

Founder	Akira Yamada
Year Founded	1924
Origin	Osaka, Japan
No. of Employees	80,369
Company Type	Public
Market Cap	$54.81 Billion (2022)
Annual Revenue	$22.953 Billion (2020)
Net Income/ Profit	¥156.25 Billion (2020)

 

Products by Daikin 

The categories of items available at Daikin are as follows:

• Split / Multi-Split Type Air Conditioners
• Unitary (Ducted Split)
• Medium / Low-Temperature Refrigeration
• VRV (Multi-Split Type Air Conditioners)
• Ventilation Products
• Packaged Air Conditioners for Facilities & Factories
• Container Refrigeration Units

Competitors of Daikin

• Daikin
• Johnson Controls
• Mitsubishi Electric
• Fujitsu
• Brooks Automation

So as we got to know about the business of Daikin, now we will discuss the SWOT analysis of Daikin.

SWOT Analysis of Daikin 

A SWOT analysis examines the strengths, weaknesses, opportunities, and threats that a firm faces. SWOT Analysis is a tried-and-true tool that enables a company like Daikin to compare its business and performance to that of its competitors.

It will give us a strategic analysis of its internal and external environment, which is crucial for understanding the SWOT Analysis of Daikin.

To better understand the SWOT analysis of Daikin, refer to the infographics below:

Below is an explicit guide to the SWOT analysis of Daikin.

Strengths of Daikin

Daikin has numerous strengths that help it to thrive in the marketplace. Some of the strengths of Daikin are

• Sustainable Development: The world contains an endless number of spaces. Daikin accepts that the air in every one of them ought to be unmistakably fit the climate they support and make it conceivable to deal with the air-to control its temperature, moistness and stream.
• Number of Acquisitions: Daikin has always been successful in a number of acquisitions including its acquiring McQuay International, OYL Industries etc. These acquisitions made Daikin Industries a major global HVAC manufacturer.
• Frequent Quality Inspection: Energizing the new examination guarantees the capacity to adjust tactile components, for example, light and smell. They will keep on recognizing potential open doors and look for arrangements to make the world’s spaces more joyful and more aDaikinable.
• Innovations: Accordingly, ‘progression’ and ‘change’ are the significant development drivers for Daikin. As the forerunner in India’s heating, ventilation, and cooling (HVAC) fragment, they are figuring out and embracing new systems.
• Future Expansions: Their momentum fabricating limits combined with nearby exploration and improvement will guarantee that they serve new business sectors and new topographies like Sri Lanka, Bangladesh and East Africa. 
• Strong Brand Network: Selling products in over 130 countries including operations in Japan, China, Australia, United States, India, Southeast Asia, Europe, Middle East, Latin America, and Africa.
• Huge Manpower Force: With an employee force of around 80,000+, Daikin is among the top Air conditioning products providers in the world.

Weaknesses of Daikin

Some of the weaknesses of Daikin which they can work upon are

• High Prices: As compared to its competitors, Daikin products price seems somehow on a higher side which makes the purchasing customer feel that Daikin is overpriced.
• Marketing Not Up to the Mark: Daikin is not very well at promoting its products as compared to its competitors. It is very hard for its customers to recall the brand name due to Daikin’s low promotion strategy.
• Zero Presence in Other Segments: Daikin is the major seller of air conditioners, ventilation systems and ducted-Ac, it has zero to no presence in other segments like refrigerators, Microwave ovens, small kitchens appliances etc. where its competitors like Voltas and IFB are playing very well. 
• Lack of Differentiation: The consumer electronics sector is saturated with brands that clone each other’s products, and there is nothing that can be done to differentiate between them. Daikin, too, is lacking in distinctiveness.
• Dependency: The corporation is heavily reliant on the Japanese market, as well as some Asian regions. As a result, it loses market share to other brands in other countries, as well as revenue opportunities.

Opportunities for Daikin

Opportunities are potential areas of focus for a company to improve results, increase sales, and, ultimately, profit. Some of the opportunities for Daikin are

• Technological Advancement: The need for Air moulding is expanding among clients everywhere, this is a gigantic chance for Daikin to use upon.
• Increase the Depth of Product Portfolio: One of the potentials for Daikin is to increase the depth of its product portfolio. It will be able to sell additional things to its already large consumer base.
• Emerging Markets: Daikin has the opportunity to focus on developing and emerging markets, particularly in Africa and Asia. These expanding markets can assist Daikin in establishing its brand in a new area, hence increasing revenue.
• Introducing Small Appliances: Daikin is well recognized for its large appliances and household appliances. However, there are a number of small appliances that are not included in Daikin’s product line. LG has already done this, and Daikin can do the same to broaden its intended consumer base and provide additional items under its brand.
• Skilled Labour: The number of skilled workers accessible in the country has expanded as a result of increasing education and training given by different institutes. This means Daikin will have to spend less on training and development if it can hire skilled labour, resulting in cost savings.

Threats to Daikin

Threats are environmental factors that can be harmful to a company’s growth. The following are some of Daikin’s threats: 

• Mature Markets: The Japanese and other Asian markets are mature markets with many brands present and well-established. As a result, establishing a presence in these areas is becoming increasingly challenging.
• Intense Competition: The severe rivalry in this industry is a big issue for Daikin. As a result, rival brands are stealing market share from Daikin, and revenue is stagnating. The competition will not subside in the near future. As a result, Daikin must consider other income and profit-generating opportunities.
• Dropping Margins: Dropping margins pose a serious threat to Daikin because they directly jeopardize the company’s expansion and survival.
• Shortage of Skilled Human Resources: Due to significant employee turnover and a growing reliance on creative solutions, the company name may experience a shortage of skilled human resources shortly.
• Saturation in Urban Markets & Stagnation in Rural Markets: This is an ongoing concern for Daikin in its area. One of the causes is that product acceptance is slow in the rural market. Second, due to the wide distances and lack of infrastructure, serving rural clients is more expensive for Daikin than serving urban ones.

This ends our detailed SWOT analysis of Daikin. Let us conclude our learning below.